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    9Dec, 2021
    Tis the season . . . for B-BEEE!

    EconoBEE would like to wish our clients, suppliers and you, dear reader, a very safe, joyful and peaceful festive season and New Year.

    We will be closing our offices on the 15th of December 2021 and be back to championing B-BBEE, EE and SD for our clients on the 3rd of January 2022. During this period, should you have any queries, please email us using: info@econobee.co.za

     

    We have some exciting line-ups for 2022 . . .  !!

    We are launching our bespoke online / virtual and face-to-face workshops on Broad-Based Black Economic Empowerment, Employment Equity and Skills Development, tailored to your individual or corporate needs! We will provide more information regarding this in subsequent newsletters, in the meantime and should you have any queries, you are most welcome to give us a call on 011 483 1190 or email us using: info@econobee.co.za
    9Nov, 2021
    Happy News to end off 2021

    It is with great pleasure that we announce that EconoBEE is officially 51% Black owned and is the leading Black Economic Empowerment (BEE) Strategy and Management Consulting firm in South Africa.

    Founded in 2000, EconoBEE is a highly specialised, niche corporate advisory business that specialises in providing companies with Research, Advice and Structuring services in the areas of Corporate Regulatory Compliance within the Broad-Based Black Economic Empowerment (B-BBEE), Employment Equity (EE), Transformation, Enterprise and Supplier Development (ESD) and Skills Development (SD) ecosystem. As a 51% Black Owned EME, EconoBEE is a Level 2 BEE compliant company with a total recognition score of 125%. As a visionary organisation within the South African BEE context, the company’s strategic goal is to ease the legal, compliance and administrative burdens and legislative shortcomings of its clients, whilst assisting in their growth endeavours. EconoBEE makes use of highly sophisticated, state-of-the-art technology software to analyse their client’s corporate ownership structures. This is further bolstered by an in-depth set of Gap Analyses in the formulation of scorecards that essentially measure the success of their clients’ strategic endeavours and corporate goals. Our team is made up of a team of consultants with a mixture of legal and commercial qualifications. EconoBEE’s revolutionary consulting concepts and analytical management methodologies  has resulted in the business, as well its brand, becoming one of the most recognized in the areas of Transformation and Broad-Based Black Economic Empowerment in South Africa.

    We look forward to growing EconoBEE to greater heights as we begin this new journey.

    27Oct, 2021
    Sector-Specific EE Targets: Are You Ready?
    The Commission of Employment Equity is currently in consultation with industry stakeholders to finalise the highly-anticipated Employment Equity Draft Amendment Bill. One of the key features of the bill will be introducing tailored Economically Active Population (EAP) targets. For employment equity compliance, this will be a simple exercise that may affect designated employers’ quantitative analysis and numerical targets for each occupational level. Due to the inter-relatedness of B-BBEE legislation and employment equity regulations, there may also be changes in management control (Statement 200) and skills development (Statement 300), as these elements include EAP targets to allocate the points you may earn. As your consultants, we have deliberated on these amendments and have strategic ideas on how best you can manage these coming changes. Give us a call at 011 483 1190 or email: info@econobee.co.za to find out how we can prepare you in advance!  
    13Oct, 2021
    Yes, Fronting is a Criminal Offence!
    A recent ruling by the B-BBEE commissioner has brought into sharp focus the misunderstanding with regards to the legitimate beneficiaries of B-BBEE. https://www.bbbeecommission.co.za/vicky-adey-consulting-cc-withdraws-from-government-panels-and-surrenders-for-cancellation-its-cidb-grading-for-misrepresentation-of-b-bbee-status/ For B-BBEE purposes, the definition of black is very specific and in terms of the Broad-Based Black Economic Empowerment Act (B-BBEE Act) the definition of “black people” is given as follows:  “Black people is a generic term which means Africans, Coloureds and Indians–
    • Who are citizens of the Republic of South Africa by birth or descent; or
    • Who became citizens of the Republic of South Africa by naturalization-
      • Before 27 April 1994; or
      • On or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalization prior to that date.”
     In the Vicky Adey consulting case, the facts were as follows: Vicky Adey Consulting CC claimed to be 100% black owned however, the alleged black ownership actually included a Nigerian national (40%), who does not qualify to benefit under the B-BBEE Act, if one considers the definition of black people in section 1 of the B-BBEE Act, as mentioned above. The B-BBEE Act specifically defines black people to exclude any non-black South African citizens, foreign nationals and those black people that acquired citizenship by naturalisation after 27 April 1994. Hence it is critical to track the background of an entity’s owner(s) in order to determine compliance with and status within the B-BBEE Act. Further, based on the information, it appears that Vicky Adey Consulting CC may have accessed opportunities within the government on the basis of the misunderstanding and this company is now bound by the consequences of that ruling. The B-BBEE commission is clear Including foreign nationals in ownership as black violates the B-BBEE Act, is contrary to the objectives of the B-BBEE Act and amounts to misrepresentation which is a form of fronting in terms of the B-BBEE Act. Another instance where the legitimate beneficiaries of B-BBEE may be confused is when two foreign nationals – who both have permanent residence – are married and have a child in South Africa. In terms of the above definition, the child is not a citizen of South Africa and would thus not be a beneficiary of B-BBEE. In summary Is fronting a criminal offence? Yes! Under the B-BBEE Codes of Good Practice, fronting is now recognised as a criminal offence. If found guilty, businesses could face a fine of up to 10% of their annual turnover or up to 10 years in prison. Want more information about ownership and what this means for your B-BBEE Scorecard? Contact EconoBEE now to help guide you with cost effective strategies to maximise your scorecard and ensure your compliance to the objectives of the B-BBEE Act.
    29Sep, 2021
    What is Socio-Economic Development and why is it different to Corporate Social Responsibility?
    In recent months, there has been some confusion surrounding the activities relating to Socio-Economic Development (SED) from a B-BBEE perspective, and Corporate Social Responsibility (CSR). Let’s look at the definition of each of these elements. Socio-Economic Development (SED) is defined in the B-BBEE Codes, as monetary or non-monetary contributions implemented for communities, natural persons or groups of natural persons, where at least 75% of the beneficiaries are black people. The objective of SED is the promotion of sustainable access to the economy for the beneficiaries. The most common contributions under SED are as follows:
    • Development programmes for black women, black youth, black disabled people as well as black people living in rural areas.
    • Support for education programmes, resources and materials at primary, secondary and tertiary education levels, as well as bursaries and scholarships.
    Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company become more conscious of the impact that they can have on all aspects of society, including economic, social and environmental. This means that in the ordinary running of a business, a company should operate in ways that enhance the society and the environment in positive ways. From the above definitions, it can be seen that while there can be an overlap in some of the activities for CSR and SED, it does not mean that these are the same initiatives. The focus of SED is to uplift specific black people and communities through targeted contributions that will provide the beneficiaries with access to the economy, through either Skills Development, Healthcare, or Early Childhood Development Programmes. While the focus of CSR is to be a good corporate social citizen. This includes running the company in an environmentally friendly manner, providing assistance in the form of donations to NPOs as well as hosting social events which raise awareness to social issues. While some of the contributions made under CSR can qualify as SED, we must not get these initiatives confused. These are two very different initiatives and in order to not lose out on B-BBEE points, SED activities must be aligned with what is outlined in the B-BBEE codes. To find out if your CSR is aligned to SED as defined by B-BBEE, please don’t hesitate to contact us at EconoBEE.
    14Sep, 2021
    Employment Equity Compliance vs Government Business
    A new amendment to the Employment Equity Act will have serious implications for companies who plan to do business with government going forward. In terms of section 53 of the Amendment Act, measured entities will be issued with a compliance certificate for Employment Equity which is valid for a period of twelve months from the date of issue. The EE compliance certificate will be a prerequisite for access to contracts with the State and any of its organs; it will therefore be impossible for companies to do business with the government going forward without this certificate. In terms of proposed Employment Equity amendments, the criterion for non-designated employers is to comply with the national minimum wage or prove that they have been granted exemption and have no CCMA unfair discrimination awards against them. The criteria for designated employers will be to submit annual Employment Equity Reports, comply with the national minimum wage or prove that they have been granted exemption not to pay the national minimum wage, comply with their own annual Employment Equity targets and work towards the five-year sector specific Employment Equity targets. Please feel free to reach out to us on 011 483 1190 or info@econobee.co.za if you would like to hear more.  
    31Aug, 2021
    Are you a Designated Employer and have to submit your Employment Equity Forms?
    Are you uncertain as to whether you are required, by law, to submit your employment equity forms? The submission window to submit your employment equity forms opens up on the 1st of September 2021. What is the current definition of a designated employer?
    • An employer who employs 50 or more employees,
    • Or an employer who employs fewer than 50 employees, but has a total annual turnover as reflected in Schedule 4 of the Employment Equity Amendment Act No. 47 of 2013.
    • Municipalities and organs of State
    • Employers can also volunteer to become designated employers in terms of section 14 of the EE Act.
    TURNOVER THRESHOLD APPLICABLE TO DESIGNATED EMPLOYERS
    Sector or subsectors in accordance with the Standard Industrial ClassificationTotal Annual Turnover
    AgricultureR6,00 million
    Mining and QuarryingR22,50 million
    ManufacturingR30,00 million
    Electricity, Gas and WaterR30.00 million
    ConstructionR15,00 million
    Retail and Motor Trade and Repair ServicesR45,00 million
    Wholesale Trade, Commercial Agents and Allied ServicesR75,00 million
    Catering, Accommodation and other TradeR15,00 million
    Transport, Storage and CommunicationsR30,00 million
    Finance and Business ServicesR30,00 million
    Community, Special and Personal ServicesR15,00 million
    All designated employers must submit their employment equity reports every year. If you qualify as a Designated Employer and either: Supply incorrect information, do not comply with the Employment Equity Act requirements, or do not submit the documents on time, then the following could occur:
    • You may be fined heavily by the DoL – up to 10% of turnover depending on the severity of contravention.
    • The DoL may visit you and do a full audit on your company.
    If you need help in preparing and submitting your employment equity reports or ensuring that your employment equity committee and documents are in order, please feel free to contact us at EconoBEE to assist.
    17Aug, 2021
    The ICT Sector: the complexity of definitions
    The relatively new Information and Communication Technology (ICT) sector is made up of the manufacturing and services sectors whose main activities are linked to development, production, commercialisation, and intensive use of new technology. This sector is the fastest-growing sector within South Africa, however, there does exist a scarcity of participation of Black female-owned entities. The Amended ICT Sector draft codes were gazetted on the 27th of October 2015 and, subsequently, the finalized Amended Sector Code was published in the Government Gazette on the 7th of November 2016. However, the most alarming fact about the Amended ICT Codes is that a lack of definition exists within it. Hence, in the areas where the Amended ICT sector is silent, we refer to the DTI Codes. This has sparked several debates as the DTI (Amended Codes of Good Practice) were again amended on the 31st of May 2019. A few examples of areas in contention include:
    1. The SDF calculation
    2. The absorption definition
    3. The 2.5% learnership indicator
    We had a meeting with the ICT council to discuss the above issues of debate and we were able to get an acceptable consensus on these and other issues.

    Do you fall under the ICT codes? Would you like to have guidance on the above in terms of the priority element of skills development and in other matters?

    Contact us and we can help you maximise your scorecard with minimal fuss!

    3Aug, 2021
    No “one size fits all” at verification
    Verification is an audit process that is required in order for you to be issued with a B-BBEE certificate. All five elements of the scorecard are verified with supporting evidence. Verification happens through a SANAS accredited agency which is empowered through legislation to issue you with a valid B-BBEE certificate. There is a code of conduct and checklist that verification agencies need to abide by before issuing a valid B-BBEE certificate. There is definitely no “one size fits all” process at verification due to different interpretations of the codes by verification agencies. Due to our close relationship with six of the top verification agencies in the country, we know the different interpretations out there in order to guide our clients appropriately. We will detail below what we have learnt through the 20 years of verification experience, the “must-do list” to ensuring a stress-free verification process. Planning
    • You need to have a verification project plan to guide the process of verification.
    • You need to track your turnover and NPAT every month to ensure are you still a QSE or Generic as this will impact your score due to the different targets between a QSE and Generic scorecard. Any discrepancy with your NPAT will negatively impact the score.
    • Verification planning is a year-long project. You need to have your verification file ready two months before your planned verification (also keeping it in line with when your current certificate will expire). Leaving it to the last minute is problematic.
    Format of information
    • Due to the checklist that verification agencies have, we can tell you before your verification what information will be required from you to claim points. However, the information will be required in a specific format to meet the standard of the verification agency. For example, an ID copy must be certified.
    Sampled evidence
    • Certain evidence will be requested at verification stage that is not known until the verification agency has sampled under the elements of management control, procurement and skills development. This means you need to have the information ready and on hand depending on which staff members are sampled under management control. As some companies are working virtually this can waste time at verification if information is not readily available when sampled.
    Software
    • It’s important to have a mock scorecard before you go for verification so you know what your likely level will be.
    • We are able to easily pick up when points have not been adequately awarded as we use similar software to verification agencies. Unless you know where to look, you can lose out on valuable points and your desired level. The verification agency is not under an obligation as an auditor to show you where you can earn more points, consultants are needed to fight for your points.
    Are you preparing for verification? Let us help you to generate a mock scorecard to show you the level you are likely to get. We can also assist you in the preparation of a verification file to submit to the verification agency.
    19Jul, 2021
    Have you read: The 21st CEE Report?
    The 21st Commission of Employment Equity Report has been issued and it shed light on some Employment Equity developments. These are also in line with the Draft Amendment Bill that is still being reviewed in parliament. As expected, the report has updated EAP targets which are useful in the quantitative analysis of each management level. These have changed slightly from last year: The commission has consulted most of the business sectors to set sectorial targets. The finance and business sector has finalised the discussions. Based on these developments, all designated employers should be proactive and review their EEA12 and EEA13 to be prepared. More changes are yet to come; give us a call to find out how best you can stay compliant with Employment regulations. Did you Know?
    1. You don’t have to sell your company shares in order for you to earn points on the ownership scorecard. The B-BBEE codes allow for various means in which to earn points on ownership.
    2. There are tax benefits that you can claim through specific forms of skills development. Let us show you how.
    3. Long term strategies for enterprise and supplier development ensure you will earn points over several years regardless of unexpected changes to your NPAT.
    4. The Amendment to the Employment Equity Act, which was recently released, has far stricter penalties for employers who don’t take EE seriously. Employers that don’t comply can expect strict enforcement and harsher penalties – fines of up to R2. 7mil or 10% of annual turnover.
    5. You can maximize on the skills development scorecard without having to meet the target spend.
    6. For absorption points you do not have to absorb all the learners trained to claim your skills development. Let us show you how this can be achieved.
    POPIA Compliance We take both your privacy and the POPI Act seriously, and would like to inform you that EconoServices will continue to ensure that all measures are taken to safeguard your personal information. We have put in place measures to ensure compliance with the requirements of the POPI act to prevent and stop the following:
    • No unauthorized access to personal information
    • No damage, accidental loss, misuse or destruction of any personal information on our records
    This will allow us in turn to continuously improve our systems in use and ensure we operationally continue within the legal framework of the act. Should you however, feel you would like to change your consent or information on record please feel free to contact our information officer Dr Muriel Mushariwa. You have the right to the following options in terms of your personal information:
    • Provide any updates such as address changes or contact details
    • To delete or remove your information
    • To inform us to stop contacting you
    Should we not hear from you by 23 July 2021, we will take it that permission has been given to us to continue to retain the information and to continue to communicate with you. Regarding our mailing list: No action is required if you are happy to stay on our mailing list and it will be accepted that you have consented to staying on. If you change your mind at any time in the future, you will always have the option to unsubscribe. Best wishes and keep safe. The EconoServ Team
    1Jun, 2021
    The DTI’s new ruling on Trusts in B-BBEE Ownership Initiatives!
      Dear Business Owner On the 29th of November 2018 the BBBEE Commission came out with a guide entitled “Understanding the use of Trusts in B-BBEE Ownership Initiatives”. Two important issues were raised by the Commission in its guide: 1. The use of educational trusts as part of a BBBEE ownership Initiative. 2. The involvement of minors in BBBEE ownership trusts. The BBBEE commission held that the use of “under-age children as beneficiaries will be regarded as circumvention of the B-BBEE Act as they have no capacity to exercise rights flowing from such ownership.” With regard to educational trusts, the BBBEE commission held that “Beneficiaries cannot be selected each year to receive benefits in the form of dividends from the measured entity, for payment of their education, training or social upliftment projects which are matters that should be catered for under corporate skills development, social investments or socio-economic development” On the 17th of May 2021 The Minister of Trade, Industry and Competition announced in  a Practice Note on discretionary Collective Enterprises, such as employee share ownership plans (ESOPs) and broad-based ownership schemes (BBOS), a change to the above interpretation by the BEE commission. The Minister clarifies several issues of misalignment in interpretation on the issue of ownership. 1. Educational trusts can be used within ownership. The DTI has ruled that discretionary schemes making distributions in terms of skills development, training and education “to members of a defined class of natural persons does not in any way detract from the Economic Interest points claimable by or through these schemes” 2.In relation to ownership regarding minors, the DTI has ruled “without derogating from the generality of this statement, minors for example, are not restricted from being participants or beneficiaries in any way, whether as part of a defined class of natural persons or individually.” Clear rules of validity have been outlined for this form of ownership, in terms of the role of fiduciaries, discretionary powers, the class of persons, meaningful board participation; etc. As measured entities, you may have asked yourselves questions such as the following:
    1. Since ownership is a priority element, how is the net value points going to be calculated or determined?
    2. Will verification agencies interview minors as part of the B-BBEE verification process?
    3. What is the balancing act that trustees need to ensure around net value and the purpose of the trust.
    EconoBEE had a meeting with the DTI and we believe that the clarification received will address the queries above. Please contact us to hear what they said!  
    18May, 2021
    B-BBEE Cost Savings!
    The COVID 19 pandemic has had a devastating impact on the South African economy. Many companies are struggling to ensure that they keep up with their BBBEE activities and maintain their points on the scorecard. The reality is that the B-BBEE legislation will not change due to the impact of COVID19. However, we at EconoBEE will always strive to advise our clients on the most cost effective ways to ensure compliance with B-BBEE. Previously, we had advised on how to save 40% on your total skills development spend and now we will help you save further on the learnership indicators specific to sector codes. Are you using any sector codes, besides general codes of good practice? Well, if you are, then there is hope for you in the Skills Development scorecard. Are you still paying a lot on learnerships to cover/meet the requirement for the learnership indicators? Let us help you save half of the cost with regards to the learnership indicators. We have also found strategies that will assist Construction sector code companies to save on Supplier Development. Please feel free to reach out to us on 011 483 1190 or info@econobee.co.za if you would like to hear more.  
    5May, 2021
    MAY MADNESS!
    During the month of May, EconoBEE will be running specially tailored full-day and half-day B-BBEE workshops with an added twist! Our Directors will be unpacking extra information which includes, but is not limited to, the following:
    • How the new measured period will impact measured entities
    • The debate around sale of assets and how it impacts ownership points
    • The B-BBEE Commission’s changes to non-compliant company reports
    • Recent rulings by the B-BBEE Commission around share option schemes
    • SANAS’s take on how to calculate the indicative profit margin
    • Communication from the ICT council with regard to the private contribution model
    • Annual fees that need to be paid to the ICT council
    • Discussion around the new absorption definition
    • Continued recognition complexities and how it impacts ownership points
    • ICT disability training and EAP targets
    Please contact us on info@econobee.co.za or 011 483 1190 to hear more!
    23Apr, 2021
    SANAS Clarity on measured period
    The governing body of verification agencies, the South African National Accreditation System (SANAS),  have sent a letter of clarification to all verification agencies in relation to the issue of the measured period. The letter is as follows: “I refer to the correspondence issued by Mr Yuneal Padayachy on 14 August 2020 in respect of the above-mentioned matter.(clarity on measured period)  We reiterate that the latest financial year end records must be verified for B-BBEE Verification purposes. The Verification Manual makes provision for the use of financial statements which are not audited and details the additional testing or requirements to be taken into consideration in reducing the risk to an acceptable level. These processes had been agreed to with the dtic and are not new requirements. If the intention of the legislature had been to allow for audited financial statements only, then it would not have allowed for the alternative testing or requirements on unaudited Financial Statements.  As a consequence of that communication, all verifications not done in line with that guidance, effective 15 August 2020, should be corrected. SANAS assessors will sample to determine if the guidelines had been followed by all Rating Agencies” The impact of this communication is as follows:
    1. Measured entities will not be allowed to use a measured period different to their financial period.
    2. Management accounts need to be aligned to the financial period, therefore an unaligned rating period will not be used.
    3. A measured entity is now required to use its most current financial information for a BBBEE audit. For example in 2021, a measured entity with a year end of February will need to use the financial information from March 2020 to February 2021. The measured entity being audited in 2021 will not be allowed to use the financial information of March 2019 to February 2020.

    Talk to us about how this communication may impact you going forward.

     
    30Mar, 2021
    The Big Debate: Sale of Assets
    Ownership in the B-BBEE codes is by far one of the most complex elements to get right. Some entities feel bringing in new shareholders might impact the strategic direction of the entity as a whole; some just want to sell a stake but keep it minimal. Sale of assets, as an option, provides the convenience of getting ownership points without selling shares, but instead selling “a qualifying asset”. At present, there is a big debate over how many points should be allocated in this scenario! One school of thought holds that a measured entity should get full points from this arrangement. The other school of thought feels the points should be capped at 40% of the scorecard because this is indirect ownership. EconoBEE has engaged the BEE Commission and the DTI on this matter to gain clarification.

    Not only do we know how to set it up for you, but we also know the right side of this debate.

    Send us an email or give us a call and find out what we know!

      April Online Workshops
    DateWorkshop TitlePrice
    06 Apr 2021Skills Development WorkshopR1 550.00
    08 Apr 2021Half-Day Employment Equity WorkshopR1 550.00
    13 Apr 2021Half-Day B-BBEE WorkshopR1 550.00
    15 Apr 2021ICT Sector Code WorkshopR1 550.00
    20 Apr 2021FSC Sector Code WorkshopR1 550.00
    22 Apr 20212-Hour YES WorkshopR750.00
    29 Apr 2021Full-Day B-BBEE WorkshopR3 700.00
           
    16Mar, 2021
    Are YOU being paid out your Mandatory and Discretionary Grants?
    There are 2 types of Grants that are awarded to companies to assist with Training and Upskilling. These are the Mandatory Grants and Discretionary Grants. Let’s look at the difference between these Grants and the benefits of each: Mandatory Grants This Grant is payable to all levy paying companies upon submission and approval of the WSP/ATR Report. This is only paid after the WSP/ATR Report has been approved, which ensures that the SETA’s Quality Standards have been met in the submission. All submissions must be made before the deadline on 30 April, otherwise the Mandatory Grant will not be awarded. This Grant will award companies 20% of the total annual levies that are paid by the employer each month. These pay-outs are made quarterly. Discretionary Grants Discretionary Grants are awarded, as the name indicates, at the discretion of the SETA. Companies will need to apply for this grant when the window opens, which is usually a few weeks after the WSP/ATR submission. The application process is fairly lengthy, as each company will need to specify what type of training will be implemented, the training provider that will be used, and the details of the course will need to be provided. The total cost of this training will need to be provided, including the stipend amounts that will be paid to Learners (where applicable). Companies need to ensure that the training progammes chosen in the Discretionary Grant, address the Scarce and Critical skills shortages in their respective SETA. A complete list of these Scarce and Critical Skills can be obtained from the SETA’s websites. Successful Discretionary Grant applicants can get up to 49.5% of the total levies paid back annually. This grant must be used to pay for the training that was specified in the application. This grant will be paid out quarterly, and in order for payment to be made, companies must provide progress reports for each of the learners sent on training. Who can apply for Discretionary Grants:
    1. NGOs and cooperatives in the Sector
    2. A public education and training institution
    3. A levy paying employer, who has submitted the WSP/ATR Report
    4. A non-levy paying employer, within the jurisdiction of the SETA.

    Do you need assistance with these Grants?  EconoBEE is happy to help you understand these Grants and assist with these applications. The window for Mandatory Grants is now open for most SETAs.

    Online Workshops – To peruse our 2021 Online Workshop List, please click here

     
    2Mar, 2021
    IMPORTANT changes to companies’ B-BBEE annual reports!
    The B-BBEE Commission has recently sent out a notice that it may publish the reports of non-compliant companies! Please read the below to understand the context of the notice. JSE listed companies, public companies or organs of state and SETAs must submit annual compliance reports to the B-BBEE Commission in the prescribed FORM B-BBEE 1, within 30 days of the approval of such audited financial statements and annual report. JSE listed companies specifically, can submit to the B-BBEE Commission within 30 days of the approval of such audited financial statements and annual report or 90 days at the end of the financial period. SETAs must submit a report to the B-BBEE Commission annually on the skills development spending and programmes within 30 days of the approval of such audited financial statements and annual report or 90 days at the end of the financial period. In 2017, the B-BBEE Commissioner issued an explanatory notice requiring all reporting entities to provide additional information as outlined in a compliance report matrix required by the B-BBEE Commission. Companies faced challenges in reporting on the information required in the reporting matrix. In 2019 the B-BBEE Commission found that 18.1 percent of all B-BBEE certificates submitted, were rated as non-compliant for B-BBEE and, of the 161 listed entities that reported, 4.97 percent had no data for analysis.

     The B-BBEE Commission issued another explanatory notice on the 3rd of February 2021 which will take effect on the 1st of April 2021, in an attempt to provide clarity on the matter in which to complete the reporting matrix.

     Companies that are found to be non-compliant will be given 30 days to rectify their status. The B-BBEE Commission may publish the reports in a manner that it deems appropriate of companies that are not compliant.

    Why not give us, at EconoBEE, a call on 011 483 1190 or email us and let us help simplify and expedite your transformation journey! Online Workshops – To peruse our 2021 Online Workshop List, please click here
    16Feb, 2021
    The deadline for the annual submission of the WSP is 30 April 2021!
    The law states that a company with a payroll that exceeds R500 000 per annum must be registered to pay the Skills Development Levy (SDL). All companies with 50 or more employees need to establish a Skills Development Committee and consult with the Committee prior to the submission of the skills report. All companies need to appoint a suitably qualified Skills Development Facilitator (SDF) to facilitate the training needs within the organisation and liaise with the SETA. The WSP (Workplace Skills Plan) plays a significant role in the execution of education, training and development initiatives in the organization. An employer needs to establish a WSP, which is a strategic document that details how the employer will address the needs for development and training in the workplace. Remember to link this to your succession plan! This should be in line with the core and critical skills identified by the SETA. The ATR (Annual Training Report) is accurate documentation of all the training that has taken place in the reporting period in the organisation i.e.: the ATR is the past information and the WSP is the future planned training. Benefits of Submitting your Skills Development Reports:
    • The Skills Development Act aims to develop the skills of the South African workforce, thereby improving the quality of life for workers and giving them more prospects of work. It also aims to improve productivity in the workplace, the competitiveness of employers and to promote development.
    • The Skills Development Levies collected by the SETA are channelled towards skills development. This levy can be claimed back by an employer if they submit their WSP, ATR and Pivotal training report and achieve the goals set out
    • You can claim up to 20% of the SDL you pay by submitting your WSP and ATR in time
    • In order to maximise your B-BBEE points for skills development, you need to submit your skills development report to the SETA on time
    • You are able to access SETA grants to assist in training your employees
    When skills development is structured in the best way, and core and critical skills are identified, implementation becomes sustainable and ends up saving you money. Learnerships are a key strategy to achieving your goals as well as enabling you to take advantage of the tax allowances, employee tax incentives and seta grants which reduces your overall cost. ECONOBEE is hosting a number of workshops on SKILLS DEVELOPMENT! Delegates will gain a better understanding of the requirements of the SD Act and SDL Act and will have more knowledge on how to submit your documents and how to maximise your skills development spend. We will explain how targeted skills development can actually save you money, via tax incentives, and maximise your B-BBEE skills development recognition. Can’t attend? Please contact us on 011 483 1190 and we can tailor a solution for you.
    2Feb, 2021
    Are your skills development goals aligned to your employment equity targets?
    Recently the Parliament’s Portfolio Committee on Employment and Labour has called for public comment on the Employment Equity Amendment Bill. The bill has been described by President Cyril Ramaphosa as a ‘game changer’ for Black Economic Empowerment in South Africa. The Minister of Labour, after consulting with various sectors including the Commission for Employment Equity, will be empowered through the Bill to set numerical employment equity targets for any sector or part of a sector by notice in a gazette. The Labour department has clarified that the notice may set different numerical targets for different occupational levels, sub-sectors or regions. Some of the factors which the Minister will consider when setting sector targets include:
    • The qualification, skills and experience required to be employed in a particular occupational level;
    • The rate of turn-over and natural attrition in a sector;
    • Recruitment and promotional trends within a sector.
    The Employment Equity Act is clear that “suitably qualified” candidates should be appointed.  It is therefore important that designated employers align their skills development goals to their employment equity targets so that, should there be a specific qualification or skill required for a particular occupational level, there is proper alignment. Avoid the pitfalls of non-alignment and let us help you with your skills development planning. Why not give us, at EconoBEE, a call on 011 483 1190 or email us and let us help simplify and expedite your transformation journey!   Online Workshops To peruse our 2021 Online Workshop List, please click here
    18Jan, 2021
    Are you being sold a dubious B-BBEE share option scheme? Hear what the B-BBEE Commission has to say……..
    Firstly, compliments of the season to you all and here’s to wishing everyone a good 2021! I hope you have all managed to remain safe and hopefully had a decent break! Onto interesting business matters now……. Towards the latter part of 2020 we had a non-compliant QSE client come to EconoBEE and explain that they had a consultancy offer them an ownership option, which would make them an automatic B-BBEE level 2 (via the 51% affidavit route), and they wanted our view on it. We vehemently disagreed with the structure that was being “sold” to this client, and explained why, but we committed to get clarification from the B-BBEE Commission. Background:
    • The client is a QSE company (under R50m t/o) and they are non-compliant.
    • They were advised to set up a separate company that would have 100% black shareholders (either black employees or an NGO) and this company would have a 51% share option in the main company, which would mean that they receive an automatic B-BBEE level 2 (via the affidavit route) and would therefore also not be audited by a verification firm!
    • The devil’s in the detail and the detail here is the clarification of the “share option”!
    • The 51% share option showed a lack of real ownership and control, a lack of economic interest and lacked the authority to appoint the majority of the Directors in the main company.
    • At the end of the 5 year share option period, the owner would still be able to retain control of the company and the share option would fall away.
    • The B-BBEE Commission advised that where a “measured entity in an effort to comply with the B-BBEE ownership requirements, will establish share option structure not aligned to the requirements of the B-BBEE Act, such must be reported to the B-BBEE Commission” and this could lead to a serious fronting fine and/or criminal charges.
    To read the full view of the B-BBEE Commission, please click here To listen to one of our Legal Directors discussing B-BBEE fronting issues on eNCA tv, please click here To peruse our 2021 Online Workshop List, please click here EconoBEE has been at the forefront of guiding some of South Africa’s largest generic firms to obtain their B-BBEE goals, and we are extremely adept at putting together the best, most cost-effective, B-BBEE solutions for your business. Why not give us, at EconoBEE, a call on 011 483 1190 or email us and let us help simplify and expedite your transformation journey!
    25Nov, 2020
    Has the ruling by the Supreme Court of Appeal in relation to the PPPFA changed B-BBEE ?
    EconoBEE was recently asked to participate in a live, televised interview by eNCA in relation to the Supreme Court of Appeal’s ruling on the PPPFA (preferential procurement policy framework act). Headlines such as “Court rules BEE pre-disqualification in public procurement invalid, unconstitutional” got many interested parties talking about B-BBEE. Our Legal Director Dr Muriel Mushariwa, who is one of the top minds in the country when it comes to B-BBEE and lectures at Wits University on this and other transformational subjects, provided a detailed insight into this topic which you can view by clicking here EconoBEE has been at the forefront of guiding some of South Africa’s largest generic firms to obtain their B-BBEE goals, and we are extremely adept at putting together the best, most cost-effective, B-BBEE solutions for your business. Why not give us, at EconoBEE, a call on 011 483 1190 or email us and let us help simplify and expedite your transformation journey!  
    10Nov, 2020
    B-BBEE Fronting Indicators: Are you committing fraud?
    Fronting is a form of fraudulent misrepresentation in an attempt to circumvent the BEE codes. There are various forms of fronting indicators listed in legislation. In consulting, we have come across some glaring examples which we would like to point out:
      1. The black people identified by an enterprise as its shareholders, executives or management are unaware or uncertain of their role within the enterprise.
    One such example is the reported case where the BEE commission issued a final finding of fronting after it received a grievance from the companies’ former employee. It transpired that she was formerly employed as a receptionist but that she left the company after discovering that she had been listed as a 33% shareholder, without her approval or knowledge, and without receiving any dividend in respect of her shareholding. Such fronting is usually uncovered during verification of the measured entity when verification agencies interview the identified “owners” in the business. However, in instances where the measured entity is an EME or QSE and such entities are usually not audited, this becomes problematic.
        1. The black people identified by an enterprise as its shareholders, executives or management have roles of responsibility that differ significantly from those of their non-black peers.
    One such example is a QSE company creating another company which will solely be owned by employees. This company then “buys a stake” in the QSE company to the value of 51% making it an automatic level 2 without an audit.
        1. The black people who serve in executive or management positions in an enterprise are paid significantly lower than the market norm, unless all executives or management of this enterprise are paid at a similar level.
    One such example was where a white director was earning more than the black director with a ratio of 1:20. This was genuinely concerning to the verification analyst as the black director had been in the same position for over two years, with the same salary, and was also a shareholder. The analyst concluded that this disparity in salary did not make the black shareholder a director, as it went against the principle of equal pay for work of equal value. Let EconoBEE assist you in ensuring that you are not fronting in your pursuit to be BEE compliant. Employment Equity Submissions The year is fast coming to an end and the Employment Equity deadline is looming! Have you completed your Employment Equity submission? Now is the time to do it! Why don’t you call EconoBEE on 011 483 1190 and let us help you with all your Employment Equity, as well as your Skills Development and B-BBEE needs! Online Workshops EconoBEE is hosting online workshops for both our existing clients and for anyone interested in attending. For our BEE Managed Services clients, all BEE half-day workshops are free and our full-day workshops are half-priced! Please see our website for more information on our workshops. To book, or to tailor-make a workshop for your company, please email info@econobee.co.za or call 011 483 1190.
    27Oct, 2020
    Beneficiaries of B-BBEE
    B-BBEE News! A recent article by Business Tech, regarding South African companies trying to dodge BEE laws, illustrates how critical it is to understand and adhere fully to the B-BBEE Act. Zodwa Ntuli, the current B-BBEE commissioner, said that 83% of complaints received since 2016 were related to fronting. The mining, transport, construction and engineering sectors account for most of the fronting complaints. “We want the public to know about these cases of fronting and misrepresentation of B-BBEE status to raise awareness of these practices that are detrimental to transformation and criminal in nature, with a view to identify and prevent them from occurring in our economy. Any person convicted of fronting may be imprisoned for up to 10 years and an entity may be fined up to 10% of their annual turnover, in accordance with Section 130 of the B-BBEE Act. In other recent news reports, individuals have recently been charged with fraud from incorrectly stating their race. We have also noticed that there seems to be some confusion regarding the definition of B-BBEE beneficiaries:  Who are the beneficiaries of B-BBEE? In terms of the Codes of Good Practice a Black person is a generic term which means African, Coloureds and Indians who
    1. Are citizens of the Republic of South Africa by birth or decent, or
    2. Became citizens of the Republic of South Africa by naturalisation
    (i) Before 27th of April 1994 (ii) On or after 27th of April 1994 and who would have been entitled to acquire citizenship by naturalization prior to that date. To explain number (ii) more fully: If a foreign national came to South Africa after 1994, it is unlikely that such an individual would qualify as a B-BBEE beneficiary, unless such a person was already in South Africa prior to 1994 and was not able to gain citizenship due to apartheid law. On average it takes 5 years for someone to acquire permanent residence within South Africa and a further 5 years to be eligible to apply for citizenship. Once a citizen, this individual is still not considered a beneficiary of B-BBEE. Why not give us, at EconoBEE, a call on 011 483 1190 so that we can help you understand the Act and assist with the design and implementation of cost-effective strategies to increase your company’s B-BBEE scorecard!  Online Workshops EconoBEE is hosting online workshops for both our existing clients, and for anyone interested in attending. For our BEE Managed Services clients, all BEE half-day workshops are free and our full-day workshops are half-priced! Please see our website for more information on our workshops. To book, or to tailor-make a workshop for your company, please email info@econobee.co.za or call 011 483 1190.  
    12Oct, 2020
    ALIGNMENT OF WORKPLACE POLICIES WITH EMPLOYMENT EQUITY ACT

    ALIGNMENT OF WORKPLACE POLICIES WITH EMPLOYMENT EQUITY ACT

         On the 20th of August 2020, the Minister of Employment and Labour published the Draft Code of Good Practice on the Prevention and Elimination of Violence and Harassment in the World of Work (Draft Code) for public comment. The deadline for public comment is the 20th of October 2020.The Draft Code is intended to address the prevention, elimination and management of violence and harassment that pervades the world of work, and provides for:

    • Treatment, care and support
    • Programmes, training and awareness
    • Procedures in managing violence and harassment
    • Monitoring and evaluation

    The objectives of the Draft Code are to:

    • Provide a framework and clarity on the interpretation and implementation of the Employment Equity Act 55 of 1998, as amended, pertaining to the prevention and elimination of violence and harassment including gender-based violence and harassment
    • Provide guidelines to employers, workers, employer organisations and unions on the prevention and elimination of violence and harassment, including gender-based violence and harassment as a form of unfair discrimination.
    • Guide human resource policies and practices related to violence and harassment, including gender-based violence and harassment that are based on equity, dignity, health and safety and non-discrimination.

    This legislation is likely to become law and it is important for designated and non-designated employers to align their workplace policies to the Employment Equity Act. Should the draft become law, it is imperative that all issues outlined are managed proactively rather than reactively.

    Are you unsure about the validity of your Employment Equity Plan, considering the new Draft Amendments? Why not give us, at EconoBEE, a call on 011 483 1190 and let us handle all your Employment Equity needs and ensure that you are inspection ready all year round!

    Online Workshops

    EconoBEE is hosting online workshops for both our existing clients, and for anyone interested in attending. For our BEE Managed Services clients, all BEE half-day workshops are free and our full-day workshops are half-priced! Please see our website for more information on our workshops.

    To book, or to tailor-make a workshop for your company, please email info@econobee.co.za or call 011 483 1190.

    29Sep, 2020
    Indicative Profit Margin Calculation
    INDICATIVE PROFIT MARGIN CALCULATION The indicative profit margin is applied when a measured entity has made less than a quarter of the industry norm. Enterprise development, supplier development as well as socio-economic development are based on the percentage of either a NPAT or an indicative profit margin where a measured entity has made less than 25% of the industry. The three above mentioned sub-elements constitute 24 points of the generic scorecard. SANAS issued a clarification on the 30th of July 2020 in terms of the steps to be followed when calculating the indicative profit margin, and this has prompted measured entities, BEE consultants as well as verification agencies to start querying how the steps must be followed in order to calculate the indicative profit margin. Based on our interaction with several verification agencies, SANAS as well as the DTI, it is prudent that we clarify this to you as our valued client as the answer is not straight forward. Why not give us, at EconoBEE, a call on 011 483 1190 so that we can explain and help you with queries such as: “When does a measured entity apply the average NPAT?” Or “When must the targets be turnover based etc?” or any other B-BBEE related matter!!

    OR CLICK HERE TO EMAIL US NOW

    ONLINE WORKSHOPS EconoBEE is hosting online workshops for both our existing clients and for anyone interested in attending. For our BEE Managed Services clients, all BEE half-day workshops are free and our full-day workshops are half-priced!

    CLICK HERE FOR THE 2020 WORKSHOP LIST

     
    15Sep, 2020
    Getting the most out of your skills development spend!
    Skills development is a priority element of the B-BBEE scorecard that requires a measured entity to spend on the upskilling of its staff/external people. Due to its nature, a measured entity needs to spend in order to earn points with regards to the skills development element and, as a priority element, the measured entity needs to meet 40% of the points available in order not be discounted one level. The 2013 Amended Codes of Good Practice introduced limitations of some of the spends on the codes with respect to Category F and Category G skills spend as well as any legitimate costs (indirect spend). Category F & G refer to informal and workplace learning programmes under the learning programmes matrix and is capped at 25% for COGP and 15% for ICT of the total skills development cost. Legitimate training (indirect spend) costs refer to costs such as accommodation, catering and travelling (non-exhaustive) costs which cannot exceed more than 15% of the total skills development spend. For big companies to spend 6% of the leviable amount is next to impossible, especially in the current harsh economic circumstances due to COVID however, EconoBEE has found a solution to this problem. Ask us HOW? Why not give us, at EconoBEE, a call on 011 483 1190 and let us handle all your Skills Development needs and ensure that you are getting the most out of your skills development spend! Online Workshops EconoBEE is hosting online workshops for both our existing clients and for anyone interested in attending. For our BEE Managed Services clients, all BEE half-day workshops are free and our full-day workshops are half-priced! Please see our website for more information on our workshops. To book, or to tailor-make a workshop for your company, please email info@econobee.co.za or call 011 483 1190.
    1Sep, 2020
    When an Inspector Calls!
    With the Department of Labour’s new stern approach to transformation, it is highly likely that the number of inspections will increase dramatically! These inspections will be focused on your company’s Employment Equity Plans and, specifically, whether or not the company has been implementing their plan as promised. These Employment Equity Plans should consist of the following:
    • A strategy to rectify the lack of representation of the Designated Groups.
    • Timelines for when this transformation will be put into effect.
    The following supporting documentation will be required by the Labour department on the day of the inspection:
    1. EEA13
    2. EEA2 and EEA4 for the past five years and proof of submission
    3. Minutes of the employment equity committee meetings
    4. Register of the employment equity committee meetings
    5. A letter confirming which senior manager is in charge of employment equity
    Are you ready for your Inspection? Unsure about the validity of your Employment Equity Plan, considering the new Draft Amendments? Why not give us, at EconoBEE, a call on 011 483 1190 and let us handle all your Employment Equity needs and ensure that you are inspection ready all year round! Online Workshops EconoBEE is hosting online workshops for both our existing clients, and for anyone interested in attending. For our BEE Managed Services clients, all BEE half-day workshops are free and our full-day workshops are half-priced! Please see our website for more information on our workshops. To book, or to tailor-make a workshop for your company, please email info@econobee.co.za or call 011 483 1190.
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